UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 15, 2019
GENERAL CANNABIS CORP
(Exact Name of Registrant as Specified in Charter)
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Colorado |
000-54457 |
90-1072649 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
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6565 E. Evans Avenue
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80224 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (303) 759-1300
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange
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N/A |
N/A |
N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
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Item 1.01 |
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Entry Into a Material Definitive Agreement. |
Note Amendment
On November 15, 2019, General Cannabis Corp (the “Company”) and SBI Investments LLC, 2014-1 (the “Purchaser”) entered into a Letter Agreement, dated November 15, 2019 (“Note Amendment No. 3”), pursuant to which the Company and the Purchaser (i) extended the maturity date of that certain Promissory Note, dated July 18, 2019 (the “Original Note”), as amended by a Letter Agreement, dated October 18, 2019 (“Note Amendment No. 1”) and a Letter Agreement, dated November 1, 2019 (“Note Amendment No. 2” and, together with Note Amendment No. 1 and Note Amendment No. 3, the “Amendments”), between the Company and the Purchaser, from a maturity date of November 15, 2019 to November 29, 2019 (the “Maturity Date”) and (ii) increased the principal amount of the Original Note from $855,000 to $905,000. All other terms of the Original Note remain unchanged, and were previously disclosed on the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on July 24, 2019 and is incorporated by reference.
Sale of 6565 E. Evans Avenue
On November 18, 2019, 6565 E. Evans Owner LLC, a Colorado limited liability company and a wholly-owned subsidiary of the Company (the “Seller”), entered into a Contract to Buy and Sell Real Estate (Commercial) (the “Sale Agreement”), by and between the Seller and the Credit Union of Colorado, a Federal Credit Union (“CUC”) for the sale (the “Sale”) of the Company’s greenhouse office building located at 6565 E. Evans Avenue, Denver, Colorado (the “Property”) for $1,697,000. Pursuant to the Sale Agreement, the Seller and CUC will enter into a lease agreement to allow the Seller to lease the Property following the closing of the Sale for a period of up to 90 days, with a 30 day written notice to terminate such lease agreement. The closing of the Sale is subject to customary conditions.
The foregoing description of the Original Note, the Amendments and the Sale Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the forms of the Original Note, the Amendments, and the Sale Agreement which are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
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Item 2.01 |
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Completion of Acquisition or Disposition of Assets. |
The information with respect to the Sale of 6565 E. Evans Avenue set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.
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Item 2.03 |
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Creation of a Direct Financial Obligation. |
The information with respect to the Note Amendment set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
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Item 7.01 |
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Regulation FD Disclosure. |
On November 19, 2019, the Company issued a press release announcing it has entered into the Sale Agreement. A copy of the press release is furnished and attached hereto as Exhibit 99.1.
The information in Item 7.01 of this Current Report on Form 8-K and the Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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Item 9.01 |
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Financial Statements and Exhibits. |
(d) Exhibits
The exhibit listed in the following Exhibit Index is filed as part of this Current Report on Form 8-K.
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Exhibit No. |
Description |
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Letter Agreement, dated November 15, 2019, by and between the Company and the Purchaser. (1) |
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(1) Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: November 20, 2019
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GENERAL CANNABIS CORP |
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By: |
/s/ Michael Feinsod |
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Name: |
Michael Feinsod |
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Title: |
Chief Executive Officer |
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Exhibit 10.4
GENERAL CANNABIS CORP
LETTER AGREEMENT
November 15, 2019
Reference is made to the Promissory Note (the “Note”) dated July 18, 2019, issued by General Cannabis Corp (the “Company”) to SBI Investments LLC, 2014-1. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Note.
For good and valuation consideration, the parties hereby agree, effective as of the first date above, as follows:
(a)
Extension of Maturity Date. The Maturity Date of the Note shall be extended to November 29, 2019.
(b)
Increase in Principal Amount. The Principal Amount of the Note shall be increased from $855,000 to $905,000.
(c)
Governing Law. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles.
(d)
Full Force and Effect. Except as modified hereby, the Note remains in full force and effect.
(e)
Counterparts. This letter agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this letter agreement delivered by e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this letter agreement.
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GENERAL CANNABIS CORP |
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By: |
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Name: |
Michael Feinsod |
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Title: |
Chief Executive Officer |
Agreed and approved:
SBI INVESTMENTS LLC, 2014-1
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By: |
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Name: |
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Title: |
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Exhibit 99.1
General Cannabis Announces Sale of Greenhouse Office Building
General Cannabis Corp. announced today it has entered into a contract for the sale of its Greenhouse Office building in Denver, Colorado for $1,697,500. General Cannabis acquired the property in 2014 for $1,050,000. The closing is subject to customary conditions.
General Cannabis Chairman and CEO Michael Feinsod stated “Our growth over the past five years has required us to move into space that more effectively organizes our operating subsidiaries. We are pleased that this sale will result in a profit achieved over just five years of owning the property. As we plan to enter the Colorado dispensary and cultivation business and pursue further acquisitions, we expect to relocate our Next Big Crop business throughout our operating subsidiaries. Through these actions we anticipate achieving additional synergies and operating efficiencies. We expect to close the sale and complete a move of our corporate and Iron Protection Group offices to Northwest Denver in January 2020.”
About General Cannabis Corp
General Cannabis Corp is the comprehensive national resource for the highest quality service providers available to the regulated cannabis industry. We are a trusted partner to the cultivation, production and retail sides of the cannabis business. We do this through a combination of strong operating divisions such as security, operational consulting and products, consumer goods and marketing consulting, and capital investments and real estate. As a synergistic holding company, our divisions are able to leverage the strengths of each other, as well as a larger balance sheet, to succeed. Our website address is www.generalcann.com.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements regarding the expected closing of General Cannabis’ Greenhouse Office building, General Cannabis’ acquisition plans, the relocation of the Next Big Crop team, the expected benefits of such relocation, and similar matters. Any statements that are not statements of historical fact, such as the statements described above, should be considered forward-looking statements. Some of these statements may be identified by the use of the words "may," "will," "believes," "plans," "anticipates," "expects" and similar expressions. General Cannabis has based these forward-looking statements on current expectations and projections about future events as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including the possibility that the sale of the Greenhouse Office building will not be consummated at the current sale price or at all, the Company's proposed transactions will not be consummated, changes in the Company's share price, the benefits from the potential transactions may not be fully realized or may take longer to realize than expected, and other factors those described from time to time in General Cannabis' most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q under the heading "Risk Factors" and in subsequent filings with the Securities and Exchange Commission. General Cannabis undertakes no duty to update any forward-looking statements made herein.
Contact
Brian Andrews
Chief Financial Officer
General Cannabis Corp
(303) 759-1300
